Table 2-17 Table 2-17 Shows the Output Per Week of Week

question 354

Multiple Choice

Table 2-17
Table 2-17 shows the output per week of two people, James and Lucy. They can either devote their time to making wagons or making tricycles.
-Refer to Table 2-17. Which of the following statements is true?

• A) Lucy has an absolute advantage in making both products.
• B) James has an absolute advantage in making both products.
• C) Lucy has an absolute advantage in making wagons and James in making tricycles.
• D) James has an absolute advantage in making wagons and Lucy in making tricycles.

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Definitions:

Aggregate Supply Curve

displays the total output of goods and services that firms in an economy are willing to produce and sell at different price levels, in a given time period.

Cost-Push Inflation

Inflation caused by increases in the costs of production, such as raw materials or wages, leading to a decrease in supply and an increase in prices.

Demand-Pull Inflation

A situation where prices rise because the demand for goods and services exceeds their supply in the economy.

Aggregate Demand

The total amount of goods and services demanded in the economy at a given overall price level and in a given time period.